For a business to take off and maintain momentum, presidents, investors, managers, CEOs, employers and employees are trusted to do their jobs right and to act in the best interest of the company and its stakeholders, not themselves. They have what is called fiduciary duties.
However, when a fiduciary duty isn’t met, or when a party acts against the best interests of another party and for their own interest instead, it’s considered a breach of fiduciary duty.
What does a fiduciary breach look like?
Business executives and partners are trusted to handle a company’s finances, shares, trade secrets and assets correctly and in the interests of those to whom they are responsible. So, when a party violates this trust, the results could cause financial damage to other parties. Companies can suffer a great deal of harm when duties are breached.
A party may be in breach of their fiduciary duties if the following occurs:
- A trade secret was shared with competitors to further their own financial interests
- They profit off of a company’s assets to a degree beyond their entitlements
- They misrepresent or conceal important information from others in the partnership in a way that results in financial losses
- They promote their own side business to the company’s potential clients, essentially stealing clients
It’s important to establish that a party does have a fiduciary duty and that the breach of that duty caused financial damages to the business or its stakeholders. That will allow you to take the appropriate legal action.
How do companies deal with a breach of trust?
If you think that a business partner or executive has violated their legal obligations, consider taking swift action. We help businesses struggling with internal issues, including how to mitigate damages from a fiduciary’s breach of duty. Let us help you with your recovery.